ZuoTi.Pro
Question

SCENARIO THREE Kaymore Plc acquired a piece of land on 1 April 2018. The purchase price...

SCENARIO THREE

Kaymore Plc acquired a piece of land on 1 April 2018. The purchase price of the land was K200,000. On the same date, Kaymore Plc incurred legal fees of K10,000 in relation to transfer of ownership. Kaymore Plc intends to keep the land and sell it when the market price increases substantially. The market price of land at 31 March 2019 was K225,000.

Kaymore Plc does not know how to treat the land in its financial statements for the year ended 31 March 2019.

Required:

Advise Kaymore Plc on how the above transaction should be treated in its financial statements for the year ended 31 March 2019.                                                    (6 marks)

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Land is recognized at its historical cost or purchase price, and can include any other related costs spent to put the land in

0 0
Add a comment
Know the answer?
Add Answer to:
SCENARIO THREE Kaymore Plc acquired a piece of land on 1 April 2018. The purchase price...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • SCENARIO FOUR Dalaso Plc acquired a piece of machine on 1 June 2017 at a cost...

    SCENARIO FOUR Dalaso Plc acquired a piece of machine on 1 June 2017 at a cost of K200,000. This cost is before taking into account trade discount of 5% that Dalaso Plc received on the same date. On 1 June 2018, the machine was revalued to K159,000. During the year to 31 May 2019, there was a reduction in the use of the machine because of decline in demand for Dalaso Plc’s products as a consequence of new entrants in...

  • QUESTIONS BASED ON IAS 16, IAS 23, IAS 36, IAS 38 AND IAS 40 SCENARIO ONE...

    QUESTIONS BASED ON IAS 16, IAS 23, IAS 36, IAS 38 AND IAS 40 SCENARIO ONE You are the financial controller of Mwikiti plc. Your assistant has a reasonable general accounting knowledge but is not familiar with the detailed requirements of all relevant financial reporting standards. Two issues on which he requires your advice are shown below: Transaction (a) On 1 October 2018 we bought a property, consisting of land and buildings, for K600 million (land element K360 million). I...

  • Dalaso Plc acquired a piece of machine on 1 June 2017 at a cost of K200,000....

    Dalaso Plc acquired a piece of machine on 1 June 2017 at a cost of K200,000. This cost is before taking into account trade discount of 5% that Dalaso Plc received on the same date. On 1 June 2018, the machine was revalued to K159,000. During the year to 31 May 2019, there was a reduction in the use of the machine because of decline in demand for Dalaso Pic's products as a consequence of new entrants in the market....

  • SCENARIO TWO Musonda Plc acquired an incomplete building from Veekay Limited on 31 December 2018 at...

    SCENARIO TWO Musonda Plc acquired an incomplete building from Veekay Limited on 31 December 2018 at a total cost of K200,000. On 1 January 2019 construction works on the building commenced. Musonda Plc has estimated that the building will take 15 months to be ready for use. Musonda Plc wants to sell the building immediately it is ready for use. The constructions works are expected to cost Musonda Plc K120,000. This will be financed by Musonda Plc’s existing loans’ outlay....

  • X purchased land and then erected a building. The following costs incurred were: Purchase price of...

    X purchased land and then erected a building. The following costs incurred were: Purchase price of land 1,000,000 Resource consent fees 70,000 Architects and Engineers fees 100,000 Construction of Building 1,500,000 Interest costs in relation to the Building (over the period) 180,000 The Building became available for use 3 months into the financial year ended 31 March 2017.   Calculate Depreciation using the Straight Line Method at 2.5% for this year; there is a nil residual value. Calculate depreciation for the...

  • JANUARY 2019. QUESTIONS Urban plc, a company that prepares its a company that prepares its financial statements to 3...

    JANUARY 2019. QUESTIONS Urban plc, a company that prepares its a company that prepares its financial statements to 31 December cach year involved in the construction and repair of city centre student accommod e r of inancial statements for the year ended 31 December 2018 can be finalised, outstanding issues need to be resolved. outstanding icments for them and repair of ancial staten need to be resor ended 31 Decennice stude ntre student accommodation. Before the succesusly and Urbcontract. The...

  • In October 2019, the directors of Golicio plc advised the company’s solicitors to commence legal action...

    In October 2019, the directors of Golicio plc advised the company’s solicitors to commence legal action against one of its main suppliers claiming damages of £1,000,000 in respect of losses sustained as a result of the supply of faulty raw material. According to legal advice, Golicio plc has a very good chance of winning its case; although, it is unlikely to be settled before the 2019 financial statements are finalised at the end of the year. Explain how the legal...

  • Urban ple, a company that prepares its financial statements to 31 December each year, is involved...

    Urban ple, a company that prepares its financial statements to 31 December each year, is involved in the construction and repair of city centre student accommodation. Before the financial statements for the year ended 31 December 2018 can be finalised, a number of outstanding issues need to be resolved. Issue 1: In early January 2019, a customer commenced legal action against Urban plc alleging that construction work completed in September 2018 had not been carried out in accordance with the...

  • Jaguar Land Rover PLC Jaguar Land Rover Automotive PLC (JLR) is a maker of luxury autos...

    Jaguar Land Rover PLC Jaguar Land Rover Automotive PLC (JLR) is a maker of luxury autos based in Coventry, United Kingdom. JLR uses IFRS and has a fiscal year-end of March 31. You have been asked to use your knowledge of IFRS to convert key metrics for the company to a U.S. GAAP basis. For simplicity, you may assume that the only material differences between JLR’s as-reported numbers and those it would report under U.S. GAAP are traceable to its...

  • On January 1, 2018, the Blackstone Corporation purchased a tract of land (site number 11) with...

    On January 1, 2018, the Blackstone Corporation purchased a tract of land (site number 11) with a building for $620,000. Additionally, Blackstone paid a real estate broker's commission of $38,000, legal fees of $7,000, and title insurance of $19,000. The closing statement indicated that the land value was $510,000 and the building value was $110,000. Shortly after acquisition, the building was razed at a cost of $77,000. Blackstone entered into a $3,200,000 fixed-price contract with Barnett Builders, Inc., on March...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT